The attraction of broiler production is easy to understand: put chicks into a house, grow them quickly, and sell them a few weeks later. But Dr Neil Duncan, poultry specialist at livestock solutions company C4 Africa, cautions that this apparent simplicity is precisely what could lure inexperienced producers into trouble.
“Everyone wants to jump into broilers because they think it is quick money. But is there a proper business plan to support the operation? The most important questions any prospective farmer needs to ask are: where is your market, who is your market, is there competition, why would customers buy from you? If these questions are not adequately answered, the operation is doomed to fail,” says Duncan.
For Duncan, the choice between broilers and layers therefore starts with the customer, not the chicken. Farmers need to establish whether they will be supplying rural, town, or city consumers, the size of that market, and how customers want the product presented.
A broiler could be sold live, as a slaughtered whole bird, or as portions. The latter two require refrigeration and a functioning cold chain. Egg producers similarly need to determine whether customers want graded or ungraded eggs and in which quantities they should be packed.
The Agricultural Research Council (ARC) also advises farmers to identify a reliable market before starting production, with the size, location, and requirements of that market influencing the production system.
In the ARC module on poultry production, researchers Dr Cyprial Ncobela and Dr Magdeleen Wepener note that the distinction between eggs and meat is important, since chicken meat can be frozen and stored for longer, whereas eggs are perishable and have to remain fresh as they move from producer to consumer.
Broilers need somewhere to go
Market planning becomes particularly important with broilers because their short production cycle leaves little room for delays. Birds that are ready for market need to leave the farm, or the cost of feeding them continues to eat into the margin.
“After about 35 days, if you have not sold your broilers, they start eating into your profit. Broilers are often seen as a quick way to make money, but they are not. You need to do your sums and know exactly where those birds are going before you even bring them onto the farm,” says Duncan.
This means deciding from the outset whether birds will be sold live or slaughtered, and understanding whether the intended market can accommodate the product in that form.
Duncan says assumptions about the size of the informal chicken market can give prospective producers false confidence that there will automatically be demand for their birds.
“People talk about the informal market being worth R30 billion, but that does not tell you whether there is a market for your chickens. You have to identify exactly who you want to supply, what they want, and why they would buy from you rather than your competition. It is not as straightforward as seeing a large market and assuming you can take a share of it.”
Live bird market challenges
The live-bird market also presents its own challenges. Duncan says consumer demographics and buying habits are changing, with fewer people wanting to slaughter and prepare birds themselves and more consumers buying ready-prepared food.
Selling slaughtered birds, however, introduces additional infrastructure and costs. If farmers intend to use an abattoir, they need to establish whether it has capacity to process their birds when required. Duncan says some slaughter facilities can be fully booked for long periods. Farmers who plan to slaughter and market their own birds need to factor in refrigeration and the cold chain.
The same need for market planning applies to layers. The ARC identifies inadequate grading, packaging, and transport facilities, an inability to barcode eggs, and difficulty supplying the volumes required by large supermarket chains among the barriers facing new entrants to egg production.
Egg producers also need to understand exactly how their market wants the product presented. Duncan says this includes whether eggs need to be graded and whether customers want packs of six, 12, or 18 eggs, or even trays of 30. The ARC notes that different grades also serve different markets, with Grade A eggs largely destined for household consumption, while lower grades can be supplied to bakeries and egg-breaking operations.
Know how long your money must work
The different production cycles create very different cash-flow considerations. Layer farmers who start with day-old chicks need to carry the cost of those birds for months before egg income begins.
According to the ARC, pullets are reared until about 18 weeks, when they are ready to enter the laying house, with the first small eggs appearing at around 21 weeks. Farmers can alternatively buy point-of-lay pullets.
Duncan says the decision involves more than comparing the purchase price of day-old chicks and point-of-lay birds. Farmers need to decide which breed they want, establish whether suitable birds are readily available from a reliable supplier, assess their quality, and determine the cost of getting them onto the farm.
Broiler producers need to make similar decisions about breed, supplier, availability, and cost. Day-old chicks also have to be ordered well in advance, making production planning essential. The shorter broiler cycle does not necessarily make broilers the easier option. Instead, it compresses the production, cash-flow, and marketing cycle. Birds reach market weight quickly, but the farmer consequently needs a market ready to take them just as quickly.
Feed leaves little room for poor performance
Whatever the production system, feed is one of the largest costs that farmers need to manage. The ARC states that feed can account for up to 75% of poultry production costs.
The Western Cape Department of Agriculture’s November 2023 enterprise budget for caged layers illustrates the scale of this expense. Its model, based on 9 490 birds and prices in 2023, budgets about R3,81 million for feed, compared with R1,38 million for 10 000 point-of-lay pullets. Packaging adds almost R499 000.
But reducing feed expenditure by compromising quality is not necessarily a saving. Duncan says modern poultry genetics require adequate nutrition if birds are to deliver the performance on which production budgets are based.
“Today’s birds have tremendous genetic potential, but they need the correct feed to achieve it. If you feed a low-quality ration, you cannot expect those genetics to deliver the growth or production performance they are capable of.”
This makes production benchmarks important, but Duncan cautions against applying a single profitability target to every farm. Broiler farmers need to monitor feed conversion ratio, mortality, growth rate, and slaughter age, while layer farmers need to keep track of laying percentage, mortality, feed intake, and eggs produced per hen housed. The level at which these measures translate into profit depends on the individual operation’s costs and market.
“There is no single figure that determines profitability for every farm because each operation has its own dynamics. Farmers need to quantify the performance their own business requires and then continually measure whether they are achieving it,” he says.
Management starts before the birds arrive
Some of the most expensive poultry mistakes can be made before the first chick reaches the farm. Duncan says site and farm layout, house orientation, and access roads all need to be properly planned, with professional assistance sought where necessary.
House orientation is particularly important in naturally ventilated poultry houses. He says an east-west orientation keeps more of the interior shaded during the day. With a north-south orientation, direct sunlight can enter the house for extended periods in the morning and afternoon. Trying to block that sunlight can then restrict the airflow needed for natural ventilation.
“If the house is incorrectly orientated, you can create a heat problem that is very difficult to fix. You cannot simply close the sides to keep the sun out because you then compromise ventilation. If the birds become too hot, they reduce their feed intake and their growth suffers,” explains Duncan.
The ARC similarly identifies temperature, humidity, ventilation, and ammonia as important aspects of the poultry-house environment. Heat stress can reduce feed intake and feed conversion efficiency, lower egg size and production, affect meat and egg quality, and increase mortality.
Duncan advises farmers to study the management manuals supplied by broiler and layer genetics companies before selecting a breed and to continue using them once production starts. These manuals detail the conditions and management required for birds to reach their genetic potential.
Biosecurity is another area where mistakes can have severe consequences.
“Farmers cannot afford to go into poultry production without understanding biosecurity. If a disease such as avian influenza is brought onto the farm, the consequences can be devastating and you can lose the entire operation. Hence, biosecurity has to form part of the production system from the beginning,” Duncan advises.
ARC recommended measures
The ARC recommends measures including restricting visitors, disinfecting equipment and vehicles, using protective clothing and footbaths, isolating sick birds, and properly cleaning and disinfecting poultry houses between batches.
Layers require this management discipline over a much longer production period. The ARC’s vaccination schedules illustrate the difference: the layer programme extends through the rearing period and includes continued Newcastle disease vaccination during lay, whereas the broiler programme is concentrated within the shorter growing cycle.
For Duncan, however, the fundamental management principle is the same for both systems.
“To manage, you need to monitor. Feed and water intake, temperatures, air quality, and litter quality need to be checked every day, along with egg production in layers. With broilers, you also need weekly weights and flock uniformity measurements. If you are monitoring these indicators properly, you can see when performance starts moving away from where it should be.”
Which bird fits the business?
There is therefore no universal flock size or capital investment at which either layers or broilers automatically become profitable. Farm infrastructure, production system, management ability, input costs, and the market all influence the calculation.
For a prospective poultry farmer, the decision consequently starts with a series of practical questions. Who will buy the product? How much will they take? In what form do they want it? How will it reach them? What infrastructure is needed to supply it? And why will that customer choose the farmer’s product over the competition?
Duncan says that only once these questions have been answered can the farmer calculate working capital required, determine the production performance needed to cover those costs, and decide whether layers or broilers are the better fit for the particular enterprise.
“The numbers can look good on paper, but there is much more that has to go into making the business work in practice.”
